Dauphin County Technical School Year Ended June 30, 2018

Transcription

1 Year Ended June 30, 2018 ~ TROUT,EBERSOLE&GROFF11P CPAs I BUSINESS ADVISORS SERVICE I ANSWERS I TRUST

2 Financial Statements with Supplementary Information Year Ended June 30, 2018 TABLE of CONTENTS Page Independent AuditorsReport 1 3 Required Supplementary Information Managements Discussion and Analysis 4 14 Financial Statements Statement of Net Position 15 Statement of Activities 16 Balance Sheet Governmental Funds 17 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 18 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 19 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 20 Statement of Net Position Proprietary Fund 21 Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund 22 Statement of CashFlows Proprietary Fund 23 Statement of Net Position Fiduciary Funds 24 Statement of Changes in Net Position Fiduciary Funds 25 Notes to Financial Statements 26 53

3 Financial Statements with Supplementary Information Year Ended June 30, 2018 TABLE of CONTENTS Required Supplementary Information Page Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund 54 Notes to Required Supplementary Information 55 Schedule of Changes in Net Other Postemployment Benefits (OPEB) Liability and Related Ratios Single Employer Defined Benefit OPEB Plan 56 Notes to Required Supplementary Information 57 Schedule of Employer Contributions Public School Employees Retirement System Health Insurance Premium Assistance Plan 58 Schedule of the Schools Proportionate Share of the Net Other Postemployment Benefits (OPEB) Liability Public School Employees Retirement System Health Insurance Premium Assistance Plan 59 Notes to Required Supplementary Information 60 Schedule of Employer Contributions Public School Employees Retirement System 61 Schedule of Schools Proportionate Share of the Net Pension Liability Public School Employees Retirement System 62 Notes to Required Supplementary Information 63 Supplementary Information Schedule of Expenditures of Federal Awards Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 67 & 68 Independent Auditors Report on Compliance for each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 69 & 70

4 Financial Statements with Supplementary Information Year Ended June 30, 2018 TABLE of CONTENTS Supplementary Information Page Schedule of Findings and Questioned Costs 71 Summary Schedule of Prior Audit Findings 72

5 {!; TROUT, EBERSOLE & GROFFLLP CPAs I BUSINESS ADVISORS INDEPENDENT AUDITORS REPORT To the Board Officers and Members Harrisburg, Pennsylvania Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of (the School), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the Schools basic financial statements as listed in the table of contents. Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. SERVICE I ANSWERS I TRUST LANCASTER OFFICE: 1705 Oregon Pike, Lancaster, PA Fax CAPITAL REGION OFFICE: 5000 Ritter Road, Suite 104, Mechanicsburg, PA Fax

6 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of as of June 30, 2018, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As described in Note 17 to the financial statements, adopted new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. Our opinions are not modified with respect to that matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that managements discussion and analysis on pages 4 through 14, budgetary comparison information on pages 54 and 55, the other postemployment benefits (OPEB) health care benefits plan information on pages 56 through 60, and the pension information on pages 61 through 63, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise s basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is not a required part of the basic financial statements. The schedule of expenditures of federal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. 2

7 OtherReporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 25, 2018, on our consideration of the Schools internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering s internal control over financial reporting and compliance. October 25, 2018 Lancaster, Pennsylvania TROUT, EBERSOLE & GROFF, LLP Certified Public Accountants 3

8 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 The discussion and analysis of s (the School) financial performance provides an overall review of the Schools financial activities for the fiscal year ended June 30, The intent of this discussion and analysis is to look at the financial performance as a whole. Readers should also review the notes to the basic financial statements and the financial statements to enhance their understanding of the Schools financial performance. Joint Venture is a joint venture of seven public school districts in Dauphin County, Pennsylvania organized under the Public School Code of Pennsylvania. The School provides career and technical education programs for high school students who are residents of the participating school districts and out of school youths and adults. Each school district is responsible for a share of the operating budget based on student enrollment using a formula described within the Articles of Agreement. The participating school districts include: Central Dauphin School District, Derry Township School District, Halifax Area School District, Harrisburg School District, Lower Dauphin School District, Middletown Area School District, and Susquehanna Township School District. Continuing education classes for out of school youths and adults receive no school district funding and operate on student paid tuition and federal and state grants that become available. Mission Statement The mission of the is to prepare students to enter post secondary education and industry with the attitude, skills, and knowledge necessary to be successful in a constantly changing and competitive world. Vision Through the utilization of a curriculum firmly grounded in academic and industry based standards, Dauphin County Technical School will provide all students with the skills and knowledge necessary to actively enter a dynamic and competitive high skills work force and/or post secondary education. Shared Values will promote educational achievement among students by: Requiring all students to demonstrate proficiency on Pennsylvanias Academic Standards and/or a locally designed assessment to graduate; Providing a variety of academic and career and technical training programs to meet the needs and interests of all students, with appropriate counseling in the selection of a vocation; Providing a safe environment conducive to achievement by maintaining an atmosphere that encourages respect, responsibility, positive attitudes, integrity, safety, and pride in work; Assessing individuals through the use of on going evaluations that reflect students knowledge in academic and career and technical areas. will produce self directed, life long learners by: Preparing students who will have increased opportunities for success in their chosen career path; Providing opportunities for students to learn how to be collaborative, high quality contributors to the economic and cultural life of their communities; Instilling the skills and work habits to be productive members of a changing society; Providing opportunities for adults to train and/or retrain in occupational areas. 4

9 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Shared Values will develop responsible and involved citizens by: Providing an understanding of how occupations relate to the economic and civic well being of the community and nation; Creating an awareness of the responsibilities of full time employment and independent adult living and citizenship; Encouraging students, staff, and alumni, to contribute to the economic and civic well being of the community; Increasing and enhancing the number of educational options for students to achieve high standards with particular attention to career and technical education. will encourage communication and interaction between the School and the community by: Promoting student and staff volunteerism in community events and public service projects; Cultivating relationships with employers and industry through shadowing, internship, and cooperative education opportunities. will prepare adaptive users of advanced technologies by: Designing and promoting student development on all levels toward advanced technical knowledge, concepts, and skills in relation to the requirements of industry and society. will develop caring, supportive family and community members by: Encouraging proactive family involvement in the educational process; Increasing awareness of the roles and responsibilities of family and community living. Financial Highlights The participating school districts provide the largest sum of revenue, which supports the secondary education program and totaled $13,182,750 for This amount is based on a funding formula that is agreed upon by all school districts as part of the Articles of Agreement. Contributions from the participating school districts areas follows: Central Dauphin School District 5,835,508 Derry Township School District 399,607 Halifax Area School District 417,120 Harrisburg School District 3,314,409 Lower Dauphin School District 1,071,804 Middletown Area School District 1,055,036 Susquehanna Township School District 1,089,266 Total contributions from participating school districts were 90% of the secondary programs local revenue for

10 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Financial Statements The financial statements consist of three parts: managements discussion and analysis, the basic financial statements, and required supplementary information. The basic financial statements include two kinds of statements that present different views of. The first two statements are government wide financial statements the statement of net position and the statement of activities. These provide both long term and short term information about the Schools overall financial status. The remaining statements arefund financial statements that focus on individual parts of the Schools operations in more detail than the government wide statements. The governmental funds statements tell how the Schools services were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short and long term financial information about the activities that the School operates like a business. For the School, this is the food service fund. Fiduciary fund statements provide information about financial relationships where the School acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and reports the financial statements with the comparison of Dauphin County Technical Schools budget for the year. Figure A 1 shows how the required parts of the financial report are arranged and relate to one another: Figure A 1 Required Components of s Financial Report Managements Discussion and Analysis... Basic Financial Statements... Required Supplementary Information.. Government Wide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail 6

11 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Financial Statements Figure A 2 summarizes the major features of the Schools financial statements, including the portion of the School they cover and the types of information they contain. The remainder of this overview section of the managements discussion and analysis explains the structure and contents of each of the statements. Scope Figure A 2 Major Features of s Government Wide and Fund Financial Statements Fund Statements Government Wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Entire School Theactivities of the Activities the School Instances in which the (except fiduciary School that are not operatessimilar to School is the trustee or funds). proprietary or private business food agentto someoneelses fiduciary, such as services. resources student activity education, funds & scholarship funds. administration, and community services., ~ , , ~ ,, , _ Required financial statements Accounting basis and measurement focus Type of asset/liability information Type of inflow outflow information Statement of net position; statement of activities. Accrual accounting and economic resources focus. All assets and liabilities, both financial and capital, and short termand long term. All revenues and expenses during year, regardless of whencash is received or paid. Balance sheet; statement of revenues, expenditures, and changes in fund balance. Modified accrual accounting and current financial resources focus. Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included. Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter. Statement of net position; statement of revenues, expenses, and changes in net position; statement of cash flows. Accrual accounting and economic resources focus. All assets and liabilities, both financial and capital, and short termand long term. All revenues and expenses during year, regardless of when cash is received or paid. Statement of fiduciary net position; statement of changes in fiduciary net position., Accrualaccounting and economic resources focus , , ~' All assets and liabilities, both short term and long term.,- --« ,-.. _ - - ~ All revenues and expenses during year, regardless of when cash is received or paid. 7

12 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 OVERVIEW of FINANCIAL STATEMENTS Government Wide Statements The government wide statements report information about the School as a whole using accounting methods similar to those used by private sector companies. The statement of net position includes all of the governments assets, liabilities, and deferred inflows and outflows of resources. All of the current years revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government wide statements report the Schools net position and how it has changed. Net position, the difference between the Schools assets and liabilities, is one way to measure the Schools financial health or position. Over time, increases or decreases in the Schools net position is an indication of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the School, you need to consider additional factors, such as changes in the member school district contributions and the projected enrollment of the students. The government wide financial statements of the School aredivided into two categories: Governmental Activities All of the Schools basic services are included here, such as instruction, administration, and community services. Participating school district contributions, state and federal subsidies, and grants finance most of these activities. Business Type Activities The School operates a food service operation and charges fees to staff, students, and visitors to help it cover the costs of the food service operation. Fund Financial Statements The Schools fund financial statements provide detailed information about the most significant funds, not the School as a whole. Some funds are required by state law and by bond requirements. Governmental Funds Most of the Schools activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. They are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short term view of the School operations and the services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the Schools programs. The relationship (or differences) between governmental activities (reported in the statement of net position and the statement of activities) and governmental funds is reconciled in the financial statements. 8

13 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Fund Financial Statements Proprietary Funds These funds are used to account for the Schools activities that are similar to business operations in the private sector; or where the reporting is on determining net income, financial position, changes in financial position, and a significant portion of funding through user charges. When the School charges customers for services it provides, whether to outside customers or to other units in the School, these services are generally reported in proprietary funds. The food service fund is the Schools proprietary fund and is the sameas the business type activities reported in the government wide statements, but provides more detail and additional information, such as cash flows. Fiduciary Funds The School is the trustee, or fiduciary, for assets that belong to others, such as scholarship funds or student activity funds. The School is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School excludes these activities from the other financial statements because it cannot use these assets to finance its operations. Financial Analysis of the School as a Whole The Schools total net position was $(21,965,228)at June 30, Table A 1 Net Position (In Millions) Governmental Business Type Activities Activities Total Current and Other Assets Net Capital Assets Deferred Outflows Total Assets/Outflows Current and Other Liabilities Long Term Liabilities Deferred Inflows Total Liabilities/Inflows Net Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) (26.5) (21.9) (0.4) (0.4) (26.9) (22.3) Total Net Position (21.6) (17.8) (0.3) (0.3) (21.9) (18.1) 9

14 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Financial Analysis of the School as a Whole During the current year, the School implemented GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. As a result, the School reports its full liability for a single employer plan, and its proportionate share of the PSERS Premium Assistance plan, which is a cost sharing multiple employer plan. Long term liabilities increased as a result of implementation. Also, since the statement was implemented retroactively, a prior period adjustment is reported to restate beginning net position in the government wide financial statements. Most of the Schools net position is invested in capital assets (buildings, land, and equipment). The remaining unrestricted net position is a combination of designated and undesignated amounts. The results of this years operations as a whole are reported in the statement of activities. All expenses are reported in the first column. Specific charges, grants, revenues, and subsidies that directly relate to specific expense categories are represented to determine the final amount of the Schools activities that are supported by other general revenues. The largest general revenue category is the contributions from the participating school districts. Table A 2 takes the information from that statement so you can see our total revenues for the year. Table A 2 Changes in Net Position (In Millions) Governmental Business Type Activities Activities Total REVENUE Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions General Revenues: Receipts from Member Districts Other Total Revenues

15 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Financial Analysis of the School as a Whole Table A 2 Changes in Net Position (In Millions) Governmental Business Type Activities Activities Total EXPENSES Instruction Instructional Student Support Administration Pupil Health Business Services Central Services Operation and Maintenance of Plant Other Services Interest on Long Term Debt Food Services Total Expenses Change in Net Position (0.9) (2.2) (0.0) (0.0) (0.9) (2.2) PriorPeriod Adjustment (2.9) (2.9) 0.0 Net Position End of Year (21.6) (17.8) (0.3) (0.3) (21.9) (18.1) During the current year, Harrisburg School District became a member of the School. As a result, charges for services (tuition) declined while receipts from member districts increased. In the following table, the net cost of several services increased because tuition is recorded as a program related revenue, while receipts from member districts is reported as general revenue. The tables below present the expenses of both the governmental activities and the business type activities of the School. Table A 3 shows the Schools largest functions instructional programs, instructional student support, administrative, operation and maintenance of plant, and student activities, as well as each programs net cost (total cost less revenues generated by the activities). This table also shows the net costs offset by the other unrestricted grants, subsidies, and contributions to show the remaining financial needs supported by local revenue and other miscellaneous revenues. 11

16 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 Financial Analysis of the School as a Whole Table A 3 Governmental Activities Total Cost Net Cost of Services of Services Functions/Programs: Instruction 12,187,243 11,847,726 9,107,461 5,161,767 Instructional Student Support 3,055,528 2,887,025 2,540,324 2,415,474 Administration 1,452,908 1,549,503 1,326,094 1,425,974 Pupil Health Services 175, , , ,069 Business Services 767, , , ,254 Central Services 32,861 37,328 32,861 37,328 Operation and Maintenance 2,351,136 2,451,646 2,267,642 2,370,967 Student Activities 28,700 41,070 24,683 37,480 Other Support Services 2,387 23,617 2,387 3,075 Interest on Long Term Debt 578, , , ,773 Total Governmental Activities 20,633,138 20,381,908 16,715,638 12,896,161 Table A 4 reflects the activities of the food service program, the only business type activity of the School. Table A 4 Business Type Activities Total Cost Net Cost of Services of Services Functions/Programs: Food Services 854, ,603 5,385 (6,038) Investment Earnings Total Business Type Activities 854, ,603 5,385 (6,038) The statement of revenues, expenses, and changes in net position for this proprietary fund will further detail the actual results of operations. Fund Balances At June 30, 2018, the Schools governmental funds reported a combined fund balance of $2,127,876, which is a decrease of $478,821 from June 30, This net decrease is the result of the utilization of the PSERS reserve and capital improvements. 12

17 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 General Fund The general fund maintains two reserved fund balance components as determined by the joint board resolutions to the Articles of Agreement. One fund balance shall not exceed five percent of the amount of the proposed expenditures set forth in the general fund budget for the current fiscal year. The fund balance is available for the payment only of health insurance claims which may be required to be paid by the School pursuant to its self insured health care program. The other fund balance shall not exceed fifteen percent of the amount of the proposed expenditures set forth in the general fund budget for the current fiscal year. The fund balance is available for the payment only of retirement expenditures for PSERS. At June 30, 2018, the School has a committed fund balance of $1,433,631 of which $654,860 is for health care and $778,771 is for retirement. The committed fund balance was $1,819,947 at June 30, The general fund also includes the adult education and summer school programs. At June 30, 2018, the School has an assigned fund balance of $118,375 of which $96,594 is for adult education and $21,781 is for summer school. The assigned fund balance was $128,782 at June 30, Any excess revenues over expenditures including the committed and assigned fund balances at year end are returned to the member districts. Capital Projects Fund The School is preparing for future capital projects and for new and replacement equipment purchases each year. In order to fund these projects and equipment without the need for additional school district contributions or borrowing issues, the School has established this fund and makes regular transfers from the general fund to this fund. At June 30, 2018, the School has an assigned fund balance of $495,870 and a committed fund balance of $80,000, which is an overall decrease of $82,098 from June 30, This net decrease is the result of a cyclorama and scrim for the Auditorium, HVAC upgrades, Library renovation, and funds for the matching competitive equipment grant. General Fund Budget During the fiscal year, the Joint Operating Committee (JOC) authorizes revisions to the original budget to accommodate differences from the original budget to the actual expenditures of the School. A schedule showing the Schools original and final budget amounts compared with amounts actually paid and received is provided. The School applies for federal, state, and local grants and these grants cannot always be anticipated in the budgeting process. Budgeted revenues increased $1,101,674 as a result of additional approved grants and the inclusion of the adult education and summer school programs. Budgeted expenditures and other financing uses increased $1,152,802 to compensate for the additional approved grants and the adult education and summer school programs. The net income in budgetary appropriations is a result of the adult education program. Transfers between specific categories of expenditures/financing uses occur during the year. Significant variances between budgeted and actual receipts from members and tuition in the general fund result from Harrisburg School District becoming a member district during the current year, while the budget was prepared as though Harrisburg School District would continue to be a tuition district. 13

18 MANAGEMENTSDISCUSSIONand ANALYSIS Year Ended June 30, 2018 CAPITAL ASSET and DEBT ADMINISTRATION Capital Assets At June 30, 2018, the School had $23,832,329 in governmental funds and $121,939 in business type funds invested in a broad range of capital assets, including land, buildings, furniture, and equipment. This amount represents a net decrease (including additions, deletions, and depreciation) of $390,552 from governmental activities and a net decrease of $13,506 from business type activities from June 30, Table A 5 Governmental Activities Capital Assets, net of Depreciation Land 36,120 36,120 Construction in Progress 71,000 0 Buildings 21,416,536 21,898,675 Furniture and Equipment 2,286,961 2,259,802 Vehicles 21,712 28,284 Total Capital Assets 23,832,329 24,222,881 Debt Administration Bond Obligations As of June 30, 2018, the has outstanding bond obligations of $18,145,000. Leases The School has entered into operating leases for copiers, a postage machine with meter, HVAC mechanical systems, and a bus. Other obligations include accrued vacation pay and sick leave for specific employees of the School. FACTORS BEARING on DAUPHIN COUNTY TECHNICAL SCHOOLS FUTURE Some factors that will affect the future finances of the School are employee health benefits and PSERS projected retirement rates ( %; %; %; %; %), along with collective bargaining agreements with the Educators Association and Support Personnel Association. CONTACTING the SCHOOLS FINANCIAL MANAGEMENT This financial report is designed to provide citizens, taxpayers, parents, students, investors, and creditors with a general overview of the Schools finances and to show the Joint Operating Committees accountability for the money it receives. If you have questions about this report or wish to request additional financial information, please contact the Business Office,, 6001 Locust Lane, Harrisburg, PA

19 ASSETS Current Assets Cash and Cash Equivalents $ 3,653,384 $ 138,228 $ 3,791,612 Prepaid Expenses 33, ,835 Due from Other Governments 840, ,218 Other Receivables 577,919 20, ,192 Inventories 0 5,304 5,304 Total Current Assets 5,105, ,805 5,269,161 Noncurrent Assets Land 36, ,120 Construction in Progress 71, ,000 Buildings, net of Accumulated Depreciation 21,416, ,416,536 Equipment, net of Accumulated Depreciation 2,286, ,939 2,408,900 Vehicles, net of Accumulated Depreciation 21, ,712 Total Total Noncurrent Assets 23,832, ,939 23,954,268 TOTAL ASSETS 28,937, ,744 29,223,429 DEFERRED OUTFLOWS of RESOURCES Deferred Loss on Refinancing of Bonds, net of Amortization 380, ,834 Deferred Outflows Pension 5,750, ,000 5,867,000 Deferred Outflows OPEB 340,000 6, ,000 LIABILITIES Current Liabilities Total Deferred Outflows of Resources 6,470, ,000 6,593,834 TOTAL ASSETS and DEFERRED OUTFLOWS of RESOURCES 35,408, ,744 35,817,263 Due toother Governments 2,392, ,392,218 Accounts Payable 183,642 1, ,530 Current Portion of Bonds Payable 1,095, ,095,000 Current Portion of Compensated Absences 17, ,056 Accrued Salaries and Benefits 96,111 4, ,447 Accrued Interest 185, ,280 Unearned Revenues 12,300 5,634 17,934 Other Current Liabilities 293, ,209 Total Current Liabilities 4,274,816 11,858 4,286,674 Noncurrent Liabilities Net Pension Liability 30,257, ,000 30,875,000 Bonds Payable, net of Unamortized Premium 17,876, ,876,484 Net Other Postemployment Benefits Liability 3,709,000 77,000 3,786,000 Long Term Portion of Compensated Absences 544,223 21, ,333 Total Noncurrent Liabilities 52,386, ,110 53,102,817 TOTAL LIABILITIES 56,661, ,968 57,389,491 DEFERRED INFLOWS of RESOURCES Deferred Inflows of Resources Pension 219,000 4, ,000 Deferred Inflows of Resources OPEB 167,000 3, ,000 NET POSITION Total Deferred Inflows of Resources 386,000 7, ,000 TOTAL LIABILITIES and DEFERRED INFLOWS of RESOURCES 57,047, ,968 57,782,491 Net Investment in Capital Assets 4,860, ,939 4,982,784 Unrestricted (Deficit) (26,499,849) (448,163) (26,948,012) TOTAL NET POSITION $ (21,639,004) $ (326,224) $ (21,965,228) See notes to financial statements. STATEMENT of NET POSITION June 30, Governmental Activities Business Type Activities

20 STATEMENT of ACTIVITIES Year Ended June 30, 2018 Pro_g_ram Revenues Charges Operating Capital for Grants and Grants and Governmental NetRevenue(Expense)and Chan_g_es in Net Position Business Expenses Services Contributions Contributions Activities Activities Total Type Functions/Programs Governmental Activities: Regular Instruction Vocational Instruction Other Instruction Programs Adult Education Pupil Personnel Instructional Support Staff Administration Pupil Health Business Services Central Services Operation of Plant and Maintenance Services Other Support Services Student Activities Interest on Long-Term Debt Total Governmental Activities Business-Type Activities: Food Services Total Government $ 6,916,140 $ 357,115 $ 1,011,245 $ -0- $ (5,547,780) $ -0- $ (5,547,780) 4,921, ,123 1,347,369 72,441 (3,247,578) -0- (3,247,578) 53,162 2,745 4, (45,728) -0- (45,728) 296, , (266,375) -0- (266,375) 1,029, , (836,511) -0- (836,511) 2,025, , (1,703,813) -0- (1,703,813) 1,452, , (1,326,094) -0- (1,326,094) 175, , (137,847) -0- (137,847) 767, , (697,876) -0- (697,876) 32, (32,861) -0- (32,861) 2,351, , (2,267,642) -0- (2,267,642) 2, (2,387) -0- (2,387) 28, , (24,683) -0- (24,683) 578, (578,463) -0- (578,463) 20,633, ,983 3,231,076 72,441 (16,715,638) -0- (16,715,638) 854, , , {5,385) {5,385) $ 21,487,262 $ 948,655 $ 3,745,143 $ 72,441 (16,715,638) {5,385) {16,721,023) General Revenues: Receipts from Member School Districts Investment Earnings Miscellaneous Income Total General Revenues CHANGES in NET POSITION 14,895, ,895,880 38, , , ,522 15,780, ,780,018 {935,620) {5,385) {941,005) NET POSITION Beginning, as Originally Stated Cumulative Effect of Change in Accounting Principle (Note 17) Beginning, as Restated Ending See notes to financial statements (17,823,384) (261,839) (18,085,223) (2,880,000) (59,000) (2,939,000) (20,703,384) (320,839) (21,024,223) $ (21,639,004) $ {326,224) $ {21,965,228)

21 BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2018 General Fund Major Funds Debt Service Fund Capital Projects Fund Total Governmental Funds ASSETS Cash and Cash Equivalents $ 3,048,278 $ 40,331 $ 564,775 $ 3,653,384 Prepaid Expenses 22, ,095 33,835 Due from Other Governments 833,098 7, ,218 Other Receivables 577, ,919 TOTAL ASSETS 4,482,035 47, ,870 5,105,356 LIABILITIES and FUND BALANCES LIABILITIES Due to Other Funds 279, ,720 Due to Other Governments 2,344,767 47, ,392,218 Accounts Payable 183, ,642 Accrued Salaries and Benefits 96, ,111 Unearned Revenues 12, ,300 Other Current Liabilities 13, ,489 FUND BALANCES TOTAL LIABILITIES 2,930,029 47, ,977,480 Nonspendable 22, ,740 Committed 1,433, ,000 1,513,631 Assigned 118, , ,245 Unassigned (Deficit) (22,740) 0 0 (22,740) TOTAL FUND BALANCES 1,552, ,870 2,127,876 TOTAL LIABILITIES and FUND BALANCES $ 4,482,035 $ 47,451 $ 575,870 $ 5,105,356 See notes to financial statements. 17

22 RECONCILIATION of the GOVERNMENTAL FUNDS BALANCE SHEET to the STATEMENT of NET POSITION June 30, 2018 Total fund balances governmental funds $ 2,127,876 Amount reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds. The cost of assets is $41,428,346, and the accumulated depreciation is $17,596, ,832,329 Long term liabilities, including bonds payable, are not due and payable in the current period, and therefore are not reported as liabilities in the funds. Long term liabilities and related deferred inflows/outflows of resources at year end consist of: Net Pension Liability (30,257,000) Deferred Outflows Pension 5,750,000 Deferred Inflows Pension (219,000) Net Other Postemployment Benefits Liability (3,709,000) Deferred Outflows OPEB 340,000 Deferred Inflows OPEB (167,000) Bonds Payable (18,145,000) Accrued Interest on Long Term Debt (185,280) Deferred Loss on Refinancing of Bonds, net of Amortization 380,834 Bond Premium, net of Amortization (826,484) Compensated Absences (561,279) (47,599,209) TOTAL NET POSITION GOVERNMENTAL ACTIVITIES $ (21,639,004) See notes to financial statements. 18

23 STATEMENT of REVENUES, EXPENDITURES, and CHANGES infund BALANCES GOVERNMENTAL FUNDS Year Ended June 30, 2018 Major Funds Debt Capital Total General Service Projects Governmental Fund Fund Fund Funds REVENUES Local Sources: Receipts from Member School Districts $ 13,182,750 $ 0 $ 0 $ 13,182,750 Interest Earnings on Investments 33, ,765 38,616 Tuition 613, ,983 Other Revenue 845, ,522 Total Local Sources 14,676, ,765 14,680,871 State Sources 2,680, ,680,895 Federal Sources 622, ,622 EXPENDITURES Total Revenues 17,979, ,765 17,984,388 Current: Instruction 11,313, ,313,678 Support Services 5,231, ,231,627 Operation and Maintenance of Plant Services 1,676, ,863 1,868,313 Operation of Noninstructional Services 38, ,304 Total Current 18,260, ,863 18,451,922 Debt Services: Principal 11, ,182 Interest and Fiscal Charges Total Debt Services 11, ,287 Total Expenditures 18,271, ,863 18,463,209 EXCESS (DEFICIENCY) of REVENUES over EXPENDITURES (291,723) 0 (187,098) (478,821) OTHER FINANCING SOURCES (USES) Interfund Transfers (105,000) 0 105,000 0 FUND BALANCES Net Other Financing Sources (Uses) (105,000) 0 105,000 0 NET CHANGES in FUND BALANCES (396,723) 0 (82,098) (478,821) Beginning 1,948, ,968 2,606,697 Ending $ 1,552,006 $ 0 $ 575,870 $ 2,127,876 See notes to financial statements. 19

24 RECONCILIATION of the GOVERNMENTAL FUNDS STATEMENT of REVENUES, EXPENDITURES, and CHANGES in FUND BALANCES to the STATEMENT of ACTIVITIES Year Ended June 30, 2018 Total net changes infund balances governmental funds $ (478,821) Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. The amount by which depreciation exceeds capital outlays in the period is as follows: Depreciation Expense (1,038,044) Capital Outlays 653,296 Loss on Disposal (5,804) The issuance of long term obligations (e.g., bonds, leases, loans) provides current financial resources to governmental funds, while the repayment of the principal of long term obligations consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of insurance costs, premiums, discounts, and similar sites when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The net effect of these differences in the treatment of long term obligations and related items is as follows: Repayment of Debt Principal and Capital Lease Obligations 1,066,182 Amortization of Deferred Loss on Bond Refinancing (60,369) Amortization of Bond Premium 131,011 Decrease in Accrued Interest 9,130 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Increase innet Pension Liability, net of Amortization of Deferred Items (1,079,000) Increase innet Postemployment Benefits, net of Amortization of Deferred Items (187,053) Decrease incompensated Absences 53,852 CHANGES in NET POSITION of GOVERNMENTAL ACTIVITIES $ (935,620) See notes to financial statements. 20

25 STATEMENT of NET POSITION PROPRIETARY FUND June 30, 2018 Food Service ASSETS Current Assets Cash and Cash Equivalents $ 138,228 Other Receivables 20,273 Inventories 5,304 Total Current Assets 163,805 Noncurrent Assets Equipment, net of Accumulated Depreciation 121,939 TOTAL ASSETS 285,744 DEFERRED OUTFLOWS of RESOURCES Deferred Outflows Pension 117,000 Deferred Outflows OPEB 6,000 Total Deferred Outflows of Resources 123,000 LIABILITIES TOTAL ASSETS and DEFERRED OUTFLOWS of RESOURCES 408,744 Current Liabilities Accounts Payable 1,888 Accrued Salaries and Benefits 4,336 Unearned Revenues 5,634 Total Current Liabilities 11,858 Noncurrent Liabilities Net Pension Liability 618,000 Long Term Portion of Compensated Absences 21,110 Net Other Postemployment Benefits Liability 77,000 Total Noncurrent Liabilities 716,110 TOTAL LIABILITIES 727,968 DEFERRED INFLOWS of RESOURCES Deferred Inflows Pension 4,000 Deferred Inflows OPEB 3,000 NET POSITION Total Deferred Inflows of Resources 7,000 TOTAL LIABILITIES and DEFERRED INFLOWS of RESOURCES 734,968 Net Investment in Capital Assets 121,939 Unrestricted (Deficit) (448,163) TOTAL NET POSITION $ (326,224) See notes to financial statements. 21

26 STATEMENT of REVENUES, EXPENSES, and CHANGES in NET POSITION PROPRIETARY FUND Year Ended June 30, 2018 Food Service OPERATING REVENUES Food Service Revenue $ 334,672 OPERATING EXPENSES Salaries 218,613 Employee Benefits 190,884 Supplies 425,667 Travel 1,654 Depreciation 17,306 Total Operating Expenses 854,124 OPERATING LOSS (519,452) NONOPERATING REVENUES State Sources 59,603 Federal Sources 454,464 Total Nonoperating Revenues 514,067 CHANGES in NET POSITION (5,385) NET POSITION Beginning, as Originally Stated (261,839) Cumulative Effect of Change inaccounting Principle (Note 17) (59,000) Beginning, as Restated (320,839) Ending $ (326,224) See notes to financial statements. 22

27 CASH FLOWS from OPERATING ACTIVITIES Food Service Cash Received from Users $ 332,044 Cash Payments to Employees for Service (378,271) Cash Payments to Suppliers for Goods and Services (381,535) Net Cash Used by Operating Activities (427,762) CASH FLOWS from NONCAPITAL FINANCING ACTIVITIES State Sources 59,730 Federal Sources 406,620 Net Cash Provided by Noncapital Financing Activities 466,350 CASH FLOWS from CAPITAL and RELATED FINANCING ACTIVITIES Purchases of Capital Assets (3,800) INCREASE in CASH and CASH EQUIVALENTS 34,788 CASH and CASH EQUIVALENTS Beginning of Year 103,440 End of Year 138,228 RECONCILIATION of OPERATING LOSS to NET CASH PROVIDED (USED) by OPERATING ACTIVITIES Operating Loss STATEMENT of CASH FLOWS PROPRIETARY FUND Year Ended June 30, 2018 ADJUSTMENTS to RECONCILE OPERATING LOSS to NET CASH PROVIDED (USED) by OPERATING ACTIVITIES (519,452) Depreciation 17,306 Donated Commodities Used 44,136 (Increase) Decrease in: Accounts Receivable (2,660) Inventories 6,527 Increase (Decrease) in: Accounts Payables (2,207) Accrued Salaries and Benefits 3,178 Unearned Revenue (2,638) Accrued Compensated Absences 1,653 Other Postemployment Benefits Related Changes Other than Periodic OPEB Costs 3,395 Pension Related Changes Other than Periodic Pension Costs 23,000 Total Adjustments 91,690 Net Cash Used by Operating Activities $ (427,762) SUPPLEMENTAL DISCLOSURE of NONCASH FINANCING ACTIVITIES Receipt of USDA Donated Commodities 41,468 See notes to financial statements. 23